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Wednesday, DA Davidson reaffirmed their Neutral rating and $67.00 price target for Comerica (NYSE:CMA) stock. The financial institution’s mid-quarter update, released ahead of an investor conference presentation, showed that average loan and deposit trends are aligning with the forecasts set in January. Currently trading at $58.40, InvestingPro analysis suggests the stock is undervalued, with technical indicators showing oversold conditions.
Comerica’s management did not revise its first-quarter 2025 net interest income (NII) forecast, which was previously projected to decrease by 1-2%, factoring in the impact from the Bloomberg Short-Term Bank Yield Index (BSBY). The BSBY is anticipated to contribute $27.6 million to the NII, an increase from $16.2 million in the fourth quarter of 2024. Excluding the BSBY effect, DA Davidson expects Comerica’s NII to drop by approximately 4% in the first quarter of 2025. Despite these challenges, the bank maintains a strong dividend yield of 4.77% and has consistently paid dividends for 55 consecutive years.
The update comes as Comerica, like many financial institutions, navigates a changing economic landscape. The company’s adherence to its initial guidance suggests a steady course in its operations, despite the absence of an updated NII forecast for the upcoming quarter.
DA Davidson’s analysis indicates that Comerica’s performance is on track with their expectations, hence the decision to maintain the Neutral rating and price target. This reiteration provides investors with an insight into the firm’s perspective on Comerica’s current financial trajectory.
Comerica’s stock performance will continue to be a point of interest for investors as the company progresses through the first quarter of 2025, with factors such as loan and deposit trends, as well as net interest income developments, being key indicators of its financial health.
In other recent news, Comerica Incorporated has seen several adjustments in its stock price targets and ratings following its latest financial disclosures. UBS maintained a Sell rating with a $64 target, noting that Comerica’s operating earnings per share (EPS) of $1.29 exceeded both UBS’s and the consensus estimates. However, UBS highlighted concerns over Comerica’s weaker pre-provision net revenue power for 2025 compared to street estimates. RBC Capital revised its price target to $76 while maintaining an Outperform rating, citing stronger net interest income that offsets increased expenses and a dip in core fees.
Keefe, Bruyette & Woods adjusted Comerica’s price target to $77, maintaining an Outperform rating despite mixed financial results and a noted delay in profitability improvements. Baird also revised its price target to $75, continuing to support an Outperform rating despite challenges in meeting earnings growth expectations for fiscal year 2025. DA Davidson lowered its price target to $67, maintaining a Neutral rating, and pointed out a projected 8% decline in core EPS for 2025.
These recent developments reflect a range of perspectives on Comerica’s financial health and future prospects, with analysts weighing in on various factors affecting the company’s performance. Investors are closely watching Comerica’s strategies and market positioning as the banking sector continues to navigate economic pressures.
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